Biotech stocks offer risks, payoffs – Sun, 11 Jan 2015 PST
You might want to invest in biotechnology, but be careful. It’s not an easy industry to master, and while some companies eventually skyrocket, many others flame out.
One simple way to invest in biotech is the iShares Nasdaq Biotechnology ETF (Nasdaq: IBB), which is a fund of roughly 150 stocks that has grown by an annual average of almost 15 percent over the past decade.
If you’re willing to take on more risk for a chance at a bigger reward, consider Celgene (Nasdaq: CELG), which sells the pancreatic cancer drug Abraxane. Many balk at its steep price, but …
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Biotechnology is not an easy industry to master.
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You might want to invest in biotechnology, but be careful. It’s not an easy industry to master, and while some companies eventually skyrocket, many others flame out.
One simple way to invest in biotech is the iShares Nasdaq Biotechnology ETF (Nasdaq: IBB), which is a fund of roughly 150 stocks that has grown by an annual average of almost 15 percent over the past decade.
If you’re willing to take on more risk for a chance at a bigger reward, consider Celgene (Nasdaq: CELG), which sells the pancreatic cancer drug Abraxane. Many balk at its steep price, but pancreatic cancer is notoriously tough to treat, and it’s unlikely that doctors or patients will stop using it in the absence of other options.
Celgene’s product lineup addresses tough-to-treat cancers that currently have limited treatment options. Revlimid, on pace to record sales of $5 billion this year, is the most widely used multiple myeloma drug for relapsing patients. Pomalyst is a third-line multiple myeloma drug that saw its third-quarter sales more than double, year over year. Otezla, recently approved as a treatment for psoriasis, could eclipse the billion-dollar sales mark by 2017.
Meanwhile, Celgene is also aggressive in R&D spending, conducting dozens of studies that could move its revenue needle in the future, and it has inked partnership deals on some of emerging biotechnology’s most intriguing up-and-coming therapies. (The Motley Fool has recommended Celgene.)
Ask the Fool
Q: Should I ask my brokerage to send me my stock certificates so I can store them in my safe, or is it OK for the brokerage to keep them? – C.D., Warsaw, Indiana
A: It’s very common for brokerages to hold stock certificates for investors – registering the shares in “street name.” This offers several advantages. For one thing, you don’t have to safeguard the documents, and you can’t lose them. Also, whenever you want to sell, you don’t have to mail them back to the brokerage, which can take several days. You can sell your shares within minutes by contacting your brokerage, whether by phone or online. Learn more about brokerages at broker.fool.com.
Q: Is it advisable or inadvisable to use consumer credit counseling organizations to help me get out of debt? – K.W., Clyde, Texas
A: It can be helpful, but be careful, as some such outfits can rip you off. With a good one, you might have a debt management plan (DMP) created for you, designed to get you out of debt relatively quickly. But these work only if you cooperate, and many debtors drop the ball.
Look elsewhere for help, too. Discuss your situation with a trusted banker or mortgage officer, and perhaps consult a bankruptcy lawyer, as well, to learn about your options. Many people are able to pay off their debts without outside help. Learn more about credit card debt and how to get out of it at fool.com/how-to-invest/personal -finance/index.aspx.
If you want to investigate counseling organizations, seek a nonprofit one, perhaps via the National Foundation for Credit Counseling (NFCC). Call it at (800) 388-2227 or visit nfcc.org. But first gather important tips and warnings from the Federal Trade Commission at consumer.ftc.gov.
My dumbest investment
Back in 1993, I decided to invest some of my retirement money in a company that made testosterone patches. Instead of going up, though, it went down, and I lost half my money. I then followed my broker’s advice and invested what was left in Qualcomm and Cisco Systems, and within a few years I had made a lot of money.
Warren Buffett is right: Invest in financially solid companies for the long run and watch your money grow and grow and grow. – H.S., St. Joseph, Missouri
The Fool responds: Buffett is indeed right. That said, though, if you’d hung on to your original company, you’d have done well, too. It was eventually bought by Johnson & Johnson for about $12 billion.
Many great companies go through slow periods or downturns. If you still believe in their prospects, it’s best to hang on. But if you’re significantly more confident about another company’s prospects, you might do well to sell. A great thing about investing in stocks is that there are many terrific long-term winners, and you need to find and stick with only a few to do well.
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Biotech stocks offer risks, payoffs – Sun, 11 Jan 2015 PST
